FreddieMac.com
Skip to content
Perspectives
October 02, 2017

The Bad Doesn't Outweigh the Good

Dwight Robinson
By
Dwight Robinson, SVP Human Resources, Diversity & Inclusion and Chief Diversity Officer

Earlier this year, Freddie Mac opened a Borrower Help Center in McComb, Mississippi, that helps prepare prospective buyers for responsible homeownership and helps struggling borrowers, including those with Freddie Mac-owned mortgages, avoid foreclosure. Borrower Help Centers are not new – McComb is the 14th center sponsored nationwide by Freddie Mac. The McComb center, however, was the first to open in the Lower Mississippi Delta, which has a just over 50 percent homeownership rate among African Americans compared with an overall regional homeownership rate of 70.9 percent, according to the Housing Assistance Council.

McComb is an underserved rural market. According to the U.S. Census, the median household income in McComb is $29,720 and African Americans make up 66 percent of its population. By sponsoring a Borrower Help Center in McComb, we recognize that there is important work to be done in helping underserved communities achieve the dream of affordable and sustainable homeownership.

What we didn’t anticipate was the level of excitement from the community. Traditionally, staff at our borrower help centers primarily help consumers by phone or appointment, but McComb is different. Since February, the McComb site has seen a tremendous amount of walk-ins per month, making it far and away the most popular of our 14 centers. During a three-month period this spring, over 500 people walked through the doors of 416 Marion Avenue and asked for help with mortgage education and foreclosure assistance. The demand was so great that the center widened its net, increasing the number of counties it covers from three to 11. The public enthusiasm in Mississippi is a microcosm of what’s happening in communities around the U.S., though it isn’t front-page news.

Homeownership has often been characterized as one of the foundational elements of the American Dream. But for too many African-American families throughout our country’s history, homeownership did not live up to their expectations.

Homeownership has often been characterized as one of the foundational elements of the American Dream. But for too many African-American families throughout our country’s history, homeownership did not live up to their expectations.

I only need to look to my own family to illustrate the point that homeownership isn’t necessarily a cure-all. In the 1960s, my father bought a home in Flint, Michigan – fulfilling the dream of a better, richer and fuller life. By the 1980s, however, that dream came crashing down around him, as property values plummeted and city’s crime epidemic caused him to keep a shotgun under his bed for protection.

Nearby, my mother-in-law also owned a home in Flint. Despite repeated requests from her children to move out of Flint and closer to them, she was determined to stay in her home. When she would come to our home to visit, we’d notice how deeply she slept. She didn’t sleep like that in her home. My father and mother-in-law both bought homes in search of the American Dream and found themselves living in a city where more than 41 percent of people live below the poverty level.

In 2000, my father’s home sold for $7,000. Last year, we sold my mother-in-law’s home for $5,000. A combined $12,000 for all those years of restless nights. These stories are all too familiar for many African-American families – and the housing crisis and ensuing Great Recession made things worse. The facts are sobering:

  • Between 2007 and 2009, there were about 2.5 million completed foreclosures. According to the Center for Responsible Lending, nearly 4.5 percent of white borrowers lost their homes during that period – a large, history-defining drop. During that same time, however, African-American borrowers were 70 percent more likely to lose their home to foreclosure. Eight percent of African-American borrowers lost their homes. That translates to 240,020 African-American families losing their homes nationwide to foreclosure.
  • Per the ACLU, in 2007, home equity made up 51 percent of total wealth for the average white homeowner. For the average African-American homeowner, that number was 71 percent. From the height of the boom in 2004 to the end of the Great Recession in 2010, African-American families lost a combined $110 billion in net worth. Between 2007 and 2009, a typical African-American household’s wealth declined by 19 percent, compared to a 12 percent decline for whites. And even as white households began to bounce back, minority household’s wealth continued to decline.

All that hardship might make you wonder if homeownership still has a place in the American Dream. But people don’t stop dreaming just because they had a nightmare. By many measures, last year was the best year for housing in a decade. Home sales through October 2016 were the highest since 2007 and construction reached the fastest pace since 2008. And minority homeowners will be a big part of this continued uptick. According to the Urban institute, over three-quarters of household growth from 2010 to 2020 and 88 percent of the growth from 2020 to 2030 will be among minority families.  

And that’s where Freddie Mac comes in – we’re here to help fulfill that dream. That means focusing on programs that assist and educate minority communities about homeownership.

And that’s where Freddie Mac comes in – we’re here to help fulfill that dream. That means focusing on programs that assist and educate minority communities about homeownership. The Borrower Help Centers support this mission, as do the broader efforts under Duty to Serve, which itself is an important extension of our comprehensive efforts to fulfill our broad, “Community Mission.” Our Duty to Serve plan includes programs and outreach designed to support manufactured housing, high-needs rural regions, and affordable housing preservation. Judging by the response in McComb, we’re on the right track.

Homeownership did not help my father or mother-in-law build up wealth. But that doesn’t mean that our industry stops striving to be better. It’s clear that people still believe in the American Dream. It’s our job to go out and help them fulfill those dreams.

  • Feedback

    Have a comment or question about this post? Email us to let us know what's on your mind.

    Maximum of 250 characters.